Capital Credits

Capital Credits

What are Capital Credits?

Capital credits represent each member's share of the operating capital for Nemaha-Marshall Electric Cooperative.  Any revenues over and above the cost of doing business are considered margins. These margins are allocated to members of the cooperative based on their purchases from the cooperative the previous year.  These margins are allocated to members but held by the cooperative as capital to operate the business with the intent that this capital will be repaid in later years.

What's an Allocation?

An allocation is the amount Nemaha-Marshall Electric Cooperative sets aside into a separate account to be used as operating capital for improvements and maintenance over a period of years.  These funds pay for necessary improvements and maintenance to the Nemaha-Marshall Electric lines.  The amount of capital credits allocated in a given year is based on the amount paid to the cooperative through payment of monthly electric bills. This ensures that each member receives a fair and equitable percentage of the cooperatives's total allocation for any given year.

What's a General Retirement?

A general retirement is the amount you are paid back as a capital credit refund.  When capital credits are retired a check is written to each member.  This payment reduces the member's unretired capital credit balance.  Nemaha-Marshall Electric Cooperative returns capital credits in the form of General Retirement and Estate Retirement.

The Board of Trustees decides annually whether to do a General Retirement to all capital credit holders based upon the financial condition of the cooperative. Currently Nemaha-Marshall Electric retires on average 4.75 percent annually if approved by the Board of Trustees.  Nemaha-Marshall Electric has made General Retirement payments each year since 1975 except the following years 1992, 2005, 2008 and 2009.

An Estate Retirement allows payment of capital credits of a deceased member to the heirs or estate of the deceased member.  A representative of the estate must contact the cooperative to get the estate retirement process started.  The representative must submit a notarized estate retirement application with supporting documentation.  If the membership is jointly held by the spouse, the full amount will be refunded and the spouse will start over earning capital credits.

Why can't capital credit allocations be refunded all at once?

Capital Credit funds are used for improvements and maintenance, and these are long term investments.  Capital credits cannot be refunded all at once because they help the cooperative remain financially sound, thereby ensuring a stable, reliable electric provider for the future.

What happens if a member moves or disconnects service from Nemaha-Marshall Electric?

Unretired capital credits remain on the books in the member's name until they are totally retired.  Keeping a current address on file with Nemaha-Marshall Electric will ensure that any retirements due to the member will be delivered.